Teradyne Inc (TER)

Has owned this for 12 years. Is caught up in the AI trade. Trades at 39x PE and 2.3% free cash flow yield. Is too expensive. Wants to trim it, but doesn't want to take the capital gain hit. Will trim in the new year.

Last October, he said one of the themes to watch for in 2025 was robotics. Its robotics accounts for only ~11% of revenues. Pricey. He's been writing some calls. 12-month price target of $150. Don't buy here, but over the next 6 months you can look to pick it up between $135-140.

Is up 53% in Q3, and one of the top S&P stocks in Q3. Very well-run. They make testing equipment in semis.

TER does develop 'advanced robotic systems' so we would expect it to at least be involved in the sector. It spent $435M on research and development projects last year. The stock has had a good start to the year, up 10%. P/E is 43X. It has about $600M net cash and earnings growth is projected at 30% in 2025. The last quarter was very good and estimates have ticked higher in the last four weeks. We think it looks good for a higher growth thematic stock. 
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He just sold a third of his holding. His target is $135. Take profits.

Makes equipment for the chip industry. Recall the dartboard chart described at the top of today's show of the automation/robotics ecosystem. In the hardware space, just outside the manufacturers. Testing equipment for semiconductors, wireless, storage devices. Ensures quality and reliability of high-tech products. About 20% runway to $150. Yield is 0.4%.

What's also very cool is that, yes, it's in automation. But it's also gotten into robotics to the tune of about 25% CAGR growth rate consistently for the last 2 years, compared to 20% for peers. Definitely a leader, great company.

Is up 17% in May. They directly benefit from AI because they produce semi-testing equipment. It trades at 37x with 55% and 35% earnings growth in the next two years.

Semis are the basic building block of the modern economy. The most economically sensitive area. The group has gone through a correction. Highly doubts the rally is over. Huge shortage of chips. TER, LRCX, and AMAT all look attractive. Demand will be quite strong going forward.